Business Owner Expense

Hello Taxes_for_days,

 

Knowing how best to account for expenses your business incurs is an important step in the bookkeeping process. QuickBooks Online makes recording your expenses simple, but you first have to decide what account to record them against and what type of deduction it's considered from a payroll perspective. I want to point you in the right direction to handle this transaction.

 

My team and I at QuickBooks are equipped with the skills and tools to assist you with the technical aspects of the software that you need help with. Some topics, like this one, are best left to accounting professionals. They have the know-how and expertise to guide you, and we can show you how to follow their guidance using QuickBooks. If you already have an accountant, you can invite them to work with you in QBO through the My Accountant tab. That page also features the Find a pro to help button which you can use to find a QuickBooks-certified ProAdvisor in your area that can give you a hand.

 

Generally, Mixing business and personal funds isn't advised however, it seems like the owner of the company is considering these personal expenses to be covered as a work benefit. Depending on how your accountant advises you, I want to leave you with a few articles that should give you the steps you need to record this expense in QuickBooks:

 

• Pay for personal expenses from a business credit card or bank account

• Reimburse an employee

 

The Community is a great resource, not only because of the support provided by my team but because we have an abundance of knowledgeable Community members that love to contribute their experience and skill when they can. Hopefully, a few of those members chime in here to offer you their assistance. If you have any other questions related to the technical side of QuickBooks, please reach out again and I'll happily give you a hand. 

 

Take care and have a great weekend!

Good morning Taxes_for_days,

I hope you are having an awesome weekend so far! Personal expenses are never fun inside a company file and what makes it a little difficult is that each accountant may have something different to say about account set up for this. For me, when it comes to personal expenses I would create something called an "Owner's Draw" account inside of QBO.

The set up would look like this:

Account Type: Equity
Detail Type: Owner's equity
Name: Owner's Draw
Tax Code Default: Exempt

Because this was just a "partial" personal expense from the sounds of it, in the expense, we would have multiple line items.

Whatever part of the expense would be considered as "personal" would of course target the Owner's Draw account with exempt for a tax code as we wouldn't track any tax on personal expenses, and whatever wasn't personal, we can assign it as per usual to the regular account within the same the expense transaction.

Once we are done creating our split personal expense transaction, if we have our accounts connected through The Banking Tab, we can match up our transaction as per usual.

I hope this helps!

Kindest Regards,
Lourdes Fernandez